If you live or plan to live outside the UK, recent changes in pension legislation and the UK economy mean that a pension review is essential.

Until now, Final Salary pension schemes (or Defined Benefit schemes) have been seen as a gold plated route to a comfortable retirement. Sadly, there are likely to be changes on the horizon and as a result, the key question to ask yourself is, will these schemes really be able to provide the benefits they promised over the next 20 plus years?
So why review now? Firstly, transfer values are at a record high due to gilt rates being at an all time low - some transfer values have increased by over 30% in the last 12 months. Secondly, many final salary schemes are in deficit with some calculations stating that this figure is £1 trillion. Yikes! We’ve seen the problems that this causes in companies like Tata steel and BHS. It is entirely possible that the laws could be changed to allow the schemes to reduce benefits.

Some changes have already taken place. Inflationary increases have already been allowed to change from using the Retail Prices Index (RPI) to the Consumer Prices Index (CPI); this change looks small, but over a lifetime could reduce the benefits by between 25% and 30%. In April 2015 the underfunded Public Sector pension schemes removed the option to transfer so nurses, firemen, army personnel, civil service workers etc. can no longer transfer their pensions. This makes it easier to reduce the benefits and no one is able to respond by transferring out of the scheme. When this rule was being considered, blocking the transfer of funded schemes (i.e. most final salary schemes) was also discussed and this is something that may well happen in the future.

Thirdly, reviewing your pension now means you will have the time to consider the options before any further changes (especially post Brexit) take place.

Pension funds are in trouble and changes will almost certainly be made. This could be in the form of increased contributions, reductions in benefits or increasing pension age. Forewarned is forearmed and whilst Brian doesn’t have a crystal ball, he’s been in the pensions game for long enough to be able to provide you with the correct advice for your particular circumstances. We’ve used Brian to review our pension arrangements and I strongly recommend you do the same!

You may be correct depending upon the scheme and timing. This is why we conduct a full analysis of each pension scheme (at no cost to our clients) and then a comprehensive report is provided upon which advice and decisions are based.

I am a retired IFA so don’t need any advice. I am also not doubting John Furzes’ integrity. This however can be a very expensive exercise. Pension fund managers have been known to down value holdings and once the fund is on the open market there is little or no security. Also take into account the stock market is currently over valued. So what I am saying is “beware”.

We looked into this, but were advised not to move the defined benefit scheme my husband has because of the poor return on annuities currently. It’s a huge quandary for us as whilst his pension (available in 2020) is a valuable asset, it has no contingent spouse’s element so it dies with him. As I’m 10 years younger than he is, this does worry me.

I don’t know when you received that advice or who from but Annuities are about the last thing that you should be looking at for retirement. They were the only option once but there are many options now. As you are younger than your husband there are options that will work to the advantage of you both.

If you can provide me with a telephone number I will be happy to call you for a discussion (free of charge!)

Following our conversation on Saturday I attach some information on QROPS. I also attach a client profile which will assist me in making a proper assessment of your position and giving recommendations. If you would complete this and return it to me I can do so. If you have any questions please do not hesitate to ask.

I understand your reluctance to give up the guarantees on your husband’s pension but those guarantees and pension die with him. Your being 10 years younger must be a major consideration to you both. If you transfer initially into a SIPP (Self Invested Personal Pension Plan) and, on leaving the UK transfer that to a QROPS (Qualifying Recognised Overseas Pension Scheme) then you will have full control and the pension and fund can pass to you.

Here is a link to the providers that I use which gives information on both SIPPS and QROPS and transferring from one to the other is simple. http://www.momentumpensions.com/